Schaeffer's U

This is where you'll find the basics. What's a call? What's a put? Whether it's
a call or a put, your option contract will have specific strike price. Also -- and
this is one of the big differences between stock ownership and options trading --
your option will expire on a specified date. Options trading comes with its own
lingo, which sometimes scares off beginners. This is the section where you'll learn
how to translate that lingo. You'll learn intrinsic value and time decay, and what
it means to be in the money, out of the money and at the money. Read this section
first before moving on to more advanced topics.
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Options trading isn't just about speculation -- although it can be. For example,
even many beginners are familiar with the concept of a covered call. You sell a
call contract on a stock you already own at a price above where the stock is trading.
If the stock reaches the exercise price, you sell the stock, keeping the gain and
the premium you collected at the outset of the trade. If the stock doesn't rise
to the exercise price, you still keep the premium. Win-win. Read here about the
many uses of options, from generating income, to hedging a portfolio, to pure speculation.
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Ready to try trading options? Let Senior Equities Analyst Andrea Kramer walk you
through the basics. Andrea has written hundreds of articles on options trading;
she has also hosted webinars and given presentations at prestigious trade shows.
She'll handle you beginners gently. Rookies will find plenty to chew on here, from
simple call and put buying and selling, to pairs trading and some basic spreads.
This section also includes some articles to further your options education; Andrea
discusses topics such as rolling your options, time decay, and Long-term Equity
AnticiPation Securities.
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Andrea Kramer is back as your teacher in this section, which is for traders with
a little experience. Some of these strategies have exotic names -- condors and
butterflies, guts and strangles -- but Andrea will bring it all back to earth
in plain, easy-to-understand language. And once again, Andrea
discusses some more advanced educational topics, including the Greeks and implied
volatility.
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Senior Equities Analyst Elizabeth Harrow writes for SchaeffersResearch.com, SFO
magazine, and AOL's BloggingStocks, among other outlets, and has written and presented
webinars on both beginning and advanced option topics. In this section, Elizabeth
digs in to some meatier topics, such as indexes and exchange-traded funds, how to
set stop-losses, how to enter and exit a trade, and more. Beginner or veteran, you'll
find plenty of valuable ideas here.
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What sets Schaeffer's apart from the crowd? It's Expectational Analysis®, our three-tiered
methodology for analyzing stocks, stock sectors, or the market as a whole. It combines
fundamental analysis, technical analysis, and sentiment analysis, a clear-eyed,
quantitative dissection and study of the beliefs and convictions of the market.
Our view of sentiment analysis is stongly colored by our contrarian philosophy.
In this section, you'll learn how to use technical analysis. and which indicators
we like to use. We'll also tell you how we quantify sentiment, using open interest
configurations, mutual fund flows, media coverage, and other indicators.
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We've got answers. Our team of experts stand ready to answer any questions you have
regarding options trading. Each trading day we will select one question to answer
from all those submitted. These questions have been archived below for your ongoing
perusal. Hopefully, this will quickly become an extensive library of educational
material. In order for this to be such a resource, we ask but one thing — we need
your questions. They can be as simple or as complex as you like, and we will try
to answer a fair sampling on both ends of that spectrum.

Options Trading Glossary

Can't decide whether you should be bullish or bearish? Have yet to understand the
concept behind the straddle? This glossary will give you the terms you need to get
by in the world of options trading. The glossary has been divided into sections
to make it easier for you to navigate. Click below to get started.